Ongoing incorporation costs for real estate

The issue hinges on many factors, including cost (see table attached). You should consult with your attorney and decide the best way for you.

Same Boat

We are in the same boat deciding to incorporate or not to purchase a condo.
There was another discussion on the new property taxes and my understanding was that both individuals and corporations pay or will pay 2% annually. If the property is under an individual then they are exempt for the first $5 mil. Not so the corporation. Since we don't have heirs not sure of the point of incorporating given initial costs, annual meetings,cpa etc. If we decide to rent will probably get condo insurance. If we want to incorporate at a later date will we pay more than doing it at purchase time. Any thoughts?

Incorporating later is not a good choice since you will have to pay the 4.4% transfer tax which you would avoid if you incorporate immediately.

The property tax was not increased after all. It remained at 1%.

Confused

How do you avoid the 4.4% transfer tax by incorporating immediately?

Have the seller contribute the condo in kind to your new corporation.

Fabio,
Thanks for the reply. What do you mean by "contribute the condo?" Is that only if the seller has the condo in their own corporation?

Maintaining Corporation Papers & Costs

Please pardon my density but I have been trying to work out if it is more beneficial to stay incorporated and to change the corporation into an individual owner. I don't know what the benefits versus liabilities are of maintaining the corporation. When we purchased back in 2001 incorporating was the way to go but as our place was valued at less than 1.5 million pesos back then and it still valued at less than 5 million pesos, would it be more beneficial in the long term for us to drop the corporation and privatize or to continue the annual maintenance of the business. We only have one heir so there will not be any disagreements as to inheritence. What would be the impact of dissolving the company and going private?

I certainly do not want to hijack the thread but I felt this might be the other side of the coin that needs some explanation as well.

I have read what Mr. Guzman has said as well as the referral documents but I (in my utmost cluelessness) still find that I don't have a clear understanding of the pros and cons of the situation.

I appreciate any input that can clear this up for me as I have to take care of this in March.

Thank you.

Does no one on the board have a clearer understanding of corporation versus private ownership?

I figure if we ask a lawyer they will encourage us to maintain the corporation as it would be more beneficial to them. But is it more beneficial to us the owners, given the parameters that were set out?

Please, please, some input?

:ermm: :ermm:

I am trying to access the attachment showing the various expenses associated with maintaining a corporation, but cannot until I enter a post. I am still not clear as to the difference between corporate and personal real estate taxes, income taxes on rental income, and capital gains taxes. Also can we purchase a condo as joint tenants with rights of survivorship, so that if I die, title goes to my wife with no inheritance, as in the U.S.?

Inheritance rules here are very different then the US. And it isn't just about the inheritance rules but also the tax rules on death. Outside of a corporation the governement will take it's piece of the asset value.

I am not a lawyer and hesitate to say too much more.